Morning Market Update - 5 November 2019

Pre-Open Data

International Markets vs Australian Market

Key Data for the Week

Key economic data released this week:

    • Monday – AUS – TD Securities Inflation remained at 0.1% for October and 1.5% on an annual reading.
    • Monday – EUR – Markit Manufacturing PMI rose to 45.9 for October, above expectations to remain at 45.7.
    • Tuesday – AUS – RBA Interest Rate Decision
S&P ASX 200 Last 12 Months

Australian Market

The Australian sharemarket rose 0.3% yesterday, in a mixed session of trade. Materials was the markets strongest sector after it had its best performance in 10 months. Mining heavyweights BHP and Rio Tinto rose 2.2% and 3.5% respectively, while Fortescue Metals added 4.2%.

The Financials sector was a drag on the market, following disappointing results from Westpac, which announced a 15% fall in full year profit. Westpac entered a trading halt as it sought to raise $2 billion in an institutional share placement. Of the other big banks, NAB was the weakest performer, down 2.5%, Commonwealth Bank lost 1.5% and ANZ slipped 0.9%.

The Health Care sector was mixed. CSL rose 0.4% to be at all time highs, and over 40% higher than at the start of the year, however, Ramsay Health Care fell 0.3% and Cochlear slipped 0.1%.

The Australian futures market points to a 0.55% fall today, being driven by stronger overseas markets.

Overseas Markets

European sharemarkets rose on Monday to near 2-year highs, with strong earnings helping to buoy the market. Ryanair rallied 7.8%, after the airline company reported better-than-expected Q2 earnings, however, lowered its FY profit guidance and stated it remains cautions on the outlook for the remainder of the year. Siemens Healthineers, the mother company for several medical technology companies, jumped 9.5%, after the company delivered Q4 profit significantly above forecasts.

By the close of trade, the broad based STOXX Europe 600 rose 1.0%, the UK FTSE 100 added 0.9%, France’s CAC 40 gained 1.1% and the German DAX rose 1.4%.

US sharemarkets traded higher overnight, with investors hopeful about US-China trade negotiations. The Energy sector saw strong gains, while Information Technology stocks rose amid upbeat trade headlines, with semiconductor stocks leading the charge. Micron Technology added 2.5% and Intel rose 1.9%, while Alphabet added 1.4% and Apple rose 0.7%, to be at record highs.

By the close of trade, the NASDAQ gained 0.6%, while the Dow Jones and S&P 500 both added 0.4%.

CNIS Perspective

Over the years, Melbourne Cup day has been a favourite first Tuesday of the month to make a change to the Official Cash Rate, but the odds are well and truly stacked against a change today.

While the housing sector may be showing signs of turning around, the rest of the economy looks patchy at best and could do with further stimulus, but it looks highly unlikely the RBA will cut rates again today.

The odds of no change to rates today is 93%, which suggests the RBA will hold firm on its intention of keeping Australia out of the ‘race to the bottom’ and out of the negative interest rate environment.   

Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.


The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.

Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.


Topics: CNIS, Australian Market, ASX, international markets

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